Dive Brief:
- Krispy Kreme last week announced it was selling its assets in Japan — 89 stores and 300 touchpoints — to Japanese investment firm Unison Capital in a $65 million refranchising deal. The proceeds of the deal will be used to pay down some of the doughnut maker’s debt.
- Krispy Kreme has about $906 million in long-term debt, with about $74 million classed as current, according to the brand’s latest 10-Q. The current portion of its debt rose by about $17 million during the first nine months of 2025.
- This is not the first time that Krispy Kreme has sold off a major asset to pay down debt. Krispy Kreme offloaded Insomnia Cookies in two transactions totaling more than $200 million to reduce its debt load.
Dive Insight:
CEO Josh Charlesworth told investors that the company’s primary priority in its turnaround efforts was to deleverage its balance sheet, per Krispy Kreme’s Q3 2025 earnings call last month. The first step in this process is refranchising, Charlesworth said.
Krispy Kreme is working to refranchise “certain international markets as we look for experienced long-term potential partners,” Charlesworth said.
In its Q2 earnings release, when the company first announced its turnaround plan, the chain said it was considering outsourcing U.S. logistics and focusing on using its existing production assets more effectively to boost margins and reduce the capital-intensity of its business.
More transactions similar to the Japan deal may follow as Krispy Kreme looks to pivot its international markets to an asset-light model.
Krispy Kreme CFO Raphael Duvivier said the brand had sufficient liquidity to meet short-term obligations and to make long-term investments. Krispy Kreme is still fairly close to the upper bound of the leverage ratio defined in its long-term debt agreement.
“Our bank leverage ratio was 4.5x at the end of the quarter, which is below the 5x leverage ratio limit in our credit facility,” Duvivier said. Krispy Kreme is more highly leveraged than it was at the end of fiscal 2024, per its 10-Q, when its leverage ratio was 3.9. According to the 10-Q, the chain’s interest expenses decrease if it maintains certain leverage ratios below the 4.0 mark.
The chain’s net revenue fell by about $4.5 million year over year in Q3 2025, driven by a drop in product sales, according to the 10-Q. Many restaurant and QSR chains have seen a similar erosion of sales in 2025.
The brand’s global points of access, according to its earnings release, dropped by about 950 year over year, though this was a strategic retrenchment that involved shuttering unprofitable points.
The most dramatic instance of that retreat came in the U.S., where the brand dropped out of 2,400 McDonalds’ locations over the summer after it failed to find a way to bring per-door costs in line with unit demand at its Golden Arches locations.
Krispy Kreme is far from the only restaurant chain to face pressure over its debt in recent months, nor is it facing particularly severe tribulations. Fat Brands, which expanded into the production of dessert items and baked goods through acquisitions in recent years, has a higher debt load than the doughnut maker and lacks the liquidity to meet its obligations.
